Berkshire’s Charlie Munger Hates ‘Bitcoin’s Success,’ Says it’s only Beneficial to Criminals
Vice-Chairman of Berkshire Hathaway Charlie Munger has not softened his stance against Bitcoin and other cryptocurrencies despite the nascent industry posting remarkable returns.
His continued criticism of the volatile asset class resurfaced again during a Q & A session hosted virtually on May 1 at Berkshire’s annual shareholder meeting.
Bitcoin Useful For Crooks
In his usual non-pulsed and frank manner, Warren Buffett’s right-hand man said he hated the fact that Bitcoin was gaining mainstream acceptance.
Munger believes Bitcoin is more useful to kidnappers and extortionists. The billionaire also said he wasn’t considering putting his money on a new financial product made by someone out of thin air.
“I think I should say modestly that the whole damn development is disgusting and contrary to the interests of civilization,” the American investor added.
Munger’s response came from a barrage of questions made by investors on why the conglomerate has refused to endorse Bitcoin or even invest in it. The shareholder’s meeting also saw Buffett in attendance.
The “Oracle of Omaha” had said he would not comment on the question noting that most investors watching the event would likely be Bitcoin investors. He is known to be a staunch critic of the world’s oldest cryptocurrency, once labeling it a “rat poison squared” and a “delusion” with no intrinsic value whatsoever.
But Munger felt otherwise, starting by saying the question was synonymous with waving a “red flag” in front of a bull.
But despite what might seem like a disparaging comment from two of the world’s most renowned investors, the entire crypto market has continued to make significant strides.
In a 2020 pandemic year, digital payment solutions have skyrocketed following the curfews imposed by world governments to contain the spread of the novel virus.
Bitcoin Sweeping Market Off Its Feet
In just a few short years, the crypto market made a $1 trillion mark in the financial market reaching $2 trillion before pulling back. It has since regained its all-time best record of $2 trillion.
Bitcoin holds a major share of the crypto market, sitting comfortably above $1 billion. This is due to the growing belief that Bitcoin is the perfect corporate treasury asset by institutional investors.
One of the most significant players in the Bitcoin race has been Michael Saylor’s MicroStrategy, which owns close to 100,000 BTC in their balance sheets and is $5.4 billion invested in the nascent industry.
MicroStrategy’s first BTC purchase in August 2020 has seen the software company entirely converting its reserves to crypto due to growing fears of a 2% inflation in 2021, as noted by Federal Reserve boss Jerome Powell.
“Some of the asset prices are high. You are seeing things in the capital markets that are a bit frothy. That’s a fact,” Fed Chair Powell says in response to a question from @bcheungz. “The overall financial stability picture is mixed, but on balance it’s manageable.” pic.twitter.com/6ZbiFDIQmW
— Yahoo Finance (@YahooFinance) April 28, 2021
The US firm was also joined by electric car company Tesla Inc. in February 2021 who also committed about 8% of its cash reserves to Bitcoin. The company has since gone on to sell off 10% of its BTC holdings to “test the market’s liquidity,” noting that BTC added $101 million to its Q1 earnings.
Other technology companies and payment giants, including Mastercard, Visa, Square, and a growing number of US banks, are already committing to a crypto future.
But despite this, Munger has maintained his stance that Bitcoin is not useful as a hedge noting that he personally does not own any gold reserves even as most investors see it as a store of value.
